Hines And Ivanhoé Cambridge Launch Office Development In Downtown Houston
Is Houston ready for another major office building Downtown?
Well, Hines and Ivanhoé Cambridge think so.
The duo announced plans Wednesday to develop a 47-story, 1M SF office tower on the 800 block of Texas Avenue, formerly the Houston Chronicle site, near Milam, Prairie and Travis streets. The building is slated to open in 2021.
“This tower promises to be a true ‘next-generation’ office building, drawing from the research and best practices we have learned from our office developments around the world," Hines President and CEO Jeff Hines said in news release.
So far, two anchor tenants have inked leases. Prominent Houston-based law firm Vinson & Elkins signed a 16-year lease for 212K SF to occupy the top seven floors. Hines has agreed to relocate its global headquarters to the property with a 15-year lease for 155K SF, or five floors.
In addition to providing an architectural boost to Houston's skyline, the massive office development will offer tenants and guests multiple restaurants, networking spaces, a full-service conference facility, public gardens on level 12, a high-performance fitness center and an internal 11-level parking garage to accommodate more than 1,500 cars.
This announcement comes on the heels of a PMRG quarterly report that shows citywide office space remains in surplus, and the Hines/Ivanhoé Cambridge project will face early competition from another developer building luxury office space Downtown.
Capitol Tower is a 35-story, 750K SF trophy skyscraper, which has been under construction since last summer by New York-based Skanska USA. Designed by Gensler, it is scheduled to wrap up in 2019.
Yet, one tenant representative said Downtown Houston needs more office spaces similar to this one in the marketplace, and she is confident Hines/Ivanhoé Cambridge's building will thrive.
"Our clients are seeking quality and there is a shortage of large blocks," Limestone Commercial Real Estate President Brandi McDonald said. "The flight to quality will continue to grow as the generation that raised our awareness rise[s] into leadership. This building will be fully leased by delivery.”
“We are pleased to join Hines as the anchor tenants for this new world-class, state-of-the-art building,” V&E Managing Partner Scott Wulfe said in a release. “This move presents a unique opportunity to host clients and will allow our teams to work in a space that fosters innovation, efficiency, and teamwork. This next-generation building will also allow us to continue to attract and retain the best talent and to provide the highest level of client service.”
“We are very proud to partner again with Hines in a project that will set a new standard for Downtown Houston and beyond,” Ivanhoé Cambridge Chairman and CEO Daniel Fournier said in the release. “Hines has demonstrated over and over again why they are the best at what they do; this project promises to deliver even more.”
Pelli Clarke Pelli will take lead as design architect. It has partnered with Hines on many projects, including Salesforce Tower in San Francisco.
“The Tower was designed from the inside out,” Pelli Clarke Pelli Senior Principal Fred Clarke said in a release. “We put ourselves in the mindset of future tenants to create a building that is an exciting, healthy and compelling place to work. And, given its unique placement at the northern end of the city, diagonally across from Jones Hall, the tower presents an opportunity to definitively frame Houston’s skyline while — at the street level — creating a lively, professional and civic environment. It is rare for an office building to help foster the public realm the way this building will.”
Cushman & Wakefield's Tim Relyea, Scott Wegmann, Kevin Snodgrass, Jim Bailey and Brooke Wommack represented Vinson & Elkins. Colvill Office Properties' Michael Anderson represented the owner. JLL advised the owner on the construction financing, which was arranged by New York Life Real Estate Investors, a division of NYL Investors LLC.
